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In his recent speech to members of SIFMA's compliance and legal division, Ketchum took "just a minute or two" to make his case one more time for the importance of integrating the way broker-dealers and investment advisors are regulated.

Ketchum is so moved by the fact that a typical RIA firm can go a decade under the current SEC supervisory regime without getting an examination that he mentioned it three separate times in three paragraphs -- while describing investment advice and securities brokerage as "virtually indistinguishable to the average consumer."

If that were true, then maintaining separate regulators would seem redundant -- and if it's not, then advisors have more work to do educating both Ketchum and the public about how they differ from brokers.

Ketchum went on to dismiss the prospect of the SEC getting more funding as "unlikely" and so seems to think that moving RIAs to a self-regulatory organization like FINRA is something of a done deal.

From that vantage, he addressed the genuine fear out there that FINRA "doesn't understand the differences between the two models" and that "investment advisors would be forced to live under a broker-dealer regime."

He called that one a "red herring" and said what will probably happen is that a new affiliate with a separate board would spin out of FINRA to serve advisors.

What's interesting about Ketchum's comments is that he's careful to always characterize changes as being in the best interests of investors. Whether advisors agree or disagree with him, it's probably best to frame the conversation in those terms -- and let the public see just how different the channels are.

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